Category Archives: Emergency Fund

If we carry around a spare tire in the back of the car, we’re covered in case of a flat, right? Not always.

A few years back, I had the privilege of experiencing a flat tire at midnight on a dark, muddy country road. I thought, “No problem, I’ll just pull out the spare.” It was also flat. The spare tire was placed in that vehicle when it was new and had never been used. The assumption was that it would do the job when needed. But what changed? Time.

As time went by, the spare had slowly lost its air. What “spares” do you currently have that are no longer doing the job? Spares don’t last forever. They need to be maintained. Below are a few things I suggest you look at this week:

Life Insurance: Does it still match your needs? Have you added a mortgage or had children since you first obtained that plan? Are the correct beneficiaries listed?

Poor versus Broke.

After a hurricane Katrina, my daughter and I traveled to the area affected by it to assist in the rebuilding. My job was to install plumbing in the new homes that were being built in one of the poorer areas.

Broke

While there, I had the pleasure of meeting a retired gentlemen who lived across the street from where I was working. He was in his late 80’s, and he brought over some sodas for us to drink as we worked. He told us he appreciated the work we were doing in his neighborhood. He informed us that the water had been about 4 feet deep in his home and truck. He had cleaned up his place himself and was currently working on his truck so he could get it running again (his truck was worth about $200).

He said that he was living on a $600 per month income and that the storm had set him back a little financially, but he felt he had bounced back fairly quickly. He was broke, but not poor.

Poor

Beside him sat a house that still had all of the flood residue in the yard. On the porch sat three teenage boys who lived there, each listening to his MP3 player. They motioned for me to come over to where they were sitting, so I did.

When I got there, they asked if I knew when the work crew was coming to their house to clean their yard. I stood there in disbelief. Here were three able-bodied young men who had the physical ability to take care of their own situation but were waiting on volunteers- volunteers their own age who were paying to come from other states to help. It then occurred to me that these young men had been raised to believe that they were poor and that they could not do anything about it.

Which are You?

So as you look at your own finances, are you broke or poor? Broke is temporary . . . just a bump in the road. Or are you poor, thinking that you have no control over and no input into your situation? The two definitions I’m using have nothing to do with money; they have to do with people’s attitudes and perceptions of their situations.

You have a choice, and the choice is yours.
Bryan Cooper
Financial Life Coach

In today’s economy, people often talk about how they can reduce their expenses and increase the return on their investments. There are many ways to do this, and some are more challenging than others. As I work with clients to maximize their incomes and improve their finances, one thing we discuss is how to reduce their utility costs. One of the items that typically comes up in these conversations is the programmable thermostat. Most people either they don’t have one or they have one but do not use it. According to the energystar.gov website, a programmable thermostat saves an average of $180 per year. So if you have one, start using it. If you don’t have one, get one. Spending $40 to $100 for a programmable thermostat now can save you approximately $1,800 over the next ten years. Now that is an EXCELLENT return on an investment. Talk about savings!

I had planned to talk about procrastination today, but I’ll wait until next week . . . not! No procrastinating! We’ll talk about it right now. Procrastination costs you money. For example, your car was making that noise, but you didn’t take it to the repair shop. The noise grew significantly worse. Guess what? Now, instead of paying $200 to replace the brake pads, you need $800 to replace the brake pads and the rotors. You don’t have $800, so you pulled out your credit card again. What about when you procrastinate on meal planning and spend $40 eating out instead of eating at home for $10? Both of these are typical examples of how a budget can be blown by procrastination.

Not only do these items need to be high priorities on your to-do list, but you need to actually schedule time on your calendar for them. Be sure to reasonably estimate how much time each task will require, and add a little extra time to that amount. Don’t allow procrastination to blow your budget. Instead, focus on procrastination and prioritization management.

You know them. You see them on TV. You may even work with them. They are called toxic people, and they drain the joy out of everything. Without fail, they are able to pinpoint the negatives in everything, and they always fail to notice the positives. If they do happen to stumble upon something good, they make every effort to twist it into something negative.

This negativity extends into the areas of finances and life balance. They’re always telling you why you can’t get out of debt. They say that you have to have a car payment and that no one can ever pay a mortgage off. You will never master time management, prioritization management, and goal setting. You will never set up an emergency fund or live debt free. Financial peace and freedom are out of reach. They tell you that the glass is half empty, and it’s ugly.

They are wrong, so don’t listen to them. Take steps today to avoid this negativity. Exposure to this toxic attitude can undermined your ability to get out of debt and into the life you want. Stop listening to them, and don’t believe their lies. You can get out of debt. You don’t have to have a car payment, and you can pay your mortgage off!

Instead of listening to toxic people, look for positive people who can encourage you as you pursue your goals and strive to live debt free. Listen to people who encourage you. They will help you as you attain your goals, and they will be there to celebrate your victories with you.

No, I’m not talking about the one you start seeing as you approach your mid-thirties; I’m talking about the one in your car. I know this is a money blog, but allow me to explain.

I had the privilege of experiencing a flat tire at midnight on a dark, muddy country road, only to learn my spare tire was flat. The spare tire was placed in that vehicle when it was new and had never been used. The assumption was that it would do the job when needed. But what changed? Time.

Time went by and the spare slowly lost its air. What “spares” do you currently have that are no longer doing the job? Below are a few things I suggest you look at this week:

Is your life insurance still adequate? Life brings changes, we add mortgages, we have children, etc. Also, are the named beneficiaries still accurate?

How about your auto and homeowner insurance? Are you adequately insured?

What about your will? Is it updated? Who will care for your kids should something happen to you?

Do you have an emergency fund? Or are you going to pull out the credit card and go deeper in debt if you have an emergency?

I recommend that you do one more thing- check your spare tire to make sure you are prepared should you have a flat. Don’t procrastinate!!

You never know when you might end up with a flat tire at midnight on a dark, muddy country road.